Oando rejects SEC’s ruling on outcome of forensic audit

Oando Plc has challenged the Securities and Exchange Commission’s (SEC) ruling on the outcome of the forensic audit into the company.

In a statement, the Commission on Friday, confirmed the conclusion of its investigations and that the findings from the report revealed  serious infractions by the company, and as part of measures to address these violations, directed the resignation of the affected board members, among other penalties.

However, Oando, in a statement signed by the Chief Compliant Officer and Company Secretary, Oyetola Jagun, said the company was of the view that these alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.

“The company has not been given the opportunity to see, review and respond to the forensic audit report and so is unable to ascertain what findings (if any) were made in relation to the alleged infractions and defend itself accordingly before the SEC,” the statement said.

The company thus noted that it reserves its rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interests of all its shareholders.

Aside from directing the resignation of the affected board members, and also barring the Group Chief Executive Officer (GCEO) and the Deputy Group Chief Executive Officer (DGCEO) of Oando Plc from being directors of public companies for a period of five years, SEC had also directed the convening of an Extra-Ordinary General Meeting on or before July 1, 2019, to appoint new directors. .

According to the SEC, “Following the receipt of two petitions by the Commission in 2017, investigations were conducted into the activities of Oando Plc (a company listed on the Nigerian and Johannesburg Stock Exchanges).

“Certain infractions of Securities and other relevant laws were observed. The Commission further engaged Deloitte & Touche to conduct a forensic audit of the activities of Oando Plc.

“The general public is hereby notified of the conclusion of the investigations of Oando Plc. The findings from the report revealed serious infractions such as false disclosures, market abuses, misstatements in financial statements, internal control failures, and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, amongst others.”

The SEC also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected Board members to the company.

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As required under Section 304 of the Investments and Securities Act, (ISA) 2007, the Commission said it would refer all issues with possible criminality to the appropriate criminal prosecuting authorities.

In addition, the SEC stated that other aspects of the findings would be referred to the Nigerian Stock Exchange (NSE), Federal Inland Revenue Service (FIRS), and the Corporate Affairs Commission (CAC).

“The Commission is confident that with the implementation of the above directives and introduction of some remedial measures, such unwholesome practices by public companies would be significantly reduced.

“Therefore, in line with the Federal Government’s resolve to build strong institutions, Boards of public companies are enjoined to properly perform their fiduciary duties as required under extant securities laws” the statement added.

The Commission, as the apex regulator of the Nigerian capital market, maintains its zero tolerance to market infractions, and reiterates its commitment to ensuring the fairness, integrity, efficiency and transparency of the securities market, thereby strengthening investor protection.